HILLSDALE — Trustees of the Hillsdale Board of Public Utilities recommended the Hillsdale City Council appoint Bill Smith, president of American Copper and Brass Inc., to replace departing trustee Craig S. Connor.

Connor, president and CEO of County National Bank, is stepping down after serving 10 years on the municipal utility board. The trustee committee talked to several candidates but suggested Smith, who had been considered for the last board appointment.

The board also recommended changes in fees and schedules for electrical department services. Trip charges for disconnects and notices would go up to $35 from $20 to cover actual expenses.

Single-phase underground line expansion would increase from $5.91 per lineal foot to $7.50; three-phase from $12.95 to $15. The costs of getting maps from HBPU will go from $6.50 a sheet to $9 or $30 per sheet for photo printing.

Those fees were last changed in 2009.

HBPU agreed for this year to contract out disposal of its 1 million gallons of sewage sludge to private Biotech Agronomics of Benzonia for $36,000.

New Waste Water Superintendent Kevin Lawrence said he needed the key employee who does the in house operation for plant maintenance this summer.

Biotech will provide all the equipment, permits, assume liability and find the land on which the sludge is spread.

Lawrence said HBPU may have over-applied sludge to a previous site and would have to find new land even if it did the disposal itself. He defended hiring an outside firm as the least costly alternative to getting the maintenance at the sewer plant done over the summer. Most municipal systems use one of two outside firms in Michigan for sludge disposal.

The trustees also asked staff to provide them with monthly reports on cash reserves after setting up a policy to maintain minimum levels in each of the three departments — electrical, water and waste water.

The cash reserve policy was established in a formula based on 60 days cash flow of operation. The board in March expressed concerns because of rising power costs.

Manager Rick Rose told the board he did not "foresee any situation that would place us in jeopardy that could come out of the blue" except for possible damage from a major storm.The electrical department had both restricted and unrestricted reserves of $2.178 million in March, above the recommended amount by $251,000.

HBPU had reserves of around $5 million in the past but used a majority of that to freeze the power cost adjustment (PCA) for electric bills. That ended in December, and now those costs are billed on a six-month rolling average.

The water department is below reserve limits, but Rose explained now that the waste water bonds are paid off that department will pay back loans from water by the end of the year to bring that back up.

Page 2 of 2 - Jack Bierl suggested HBPU have a plan in place for future staff and boards if there ever was a crisis. Rose explained the utility "tunes our spending month to month based on cash flow." If there were problems, staff would have proposals on how to handle the finances.

Because of questions over cash reserves and finances, Rose said he would delay a request to approve a $1.6 million dollar contract for automated metering the board was asked to consider in March until concerns of the board on cash flows are satisfied.